2019: The Year Ahead for Public Pensions

A new year is upon us and state legislatures will begin their new legislative sessions as early as this week in some states. Following last year’s midterm elections, we expect this year will be a very active year for state legislatures. In many states, lawmakers will be considering bills affecting public pensions. Today we look ahead to some of the states that may act on public pensions this year.

We begin, as we often do, with Kentucky. Following the Kentucky Supreme Court’s decision striking down SB 151 as unconstitutional and Governor Bevin’s failed 23 hour special legislative session, the path forward seems uncertain. In recent years, the Kentucky General Assembly has been doing its job and fully funding its contributions to the state’s pension plans. After suffering a string of defeats in their attempts to gut pensions, Governor Bevin and Republican leaders in the General Assembly could choose to simply fund their pension contributions and focus on passing legislation dealing with other matters of public concern. This is an election year for Governor Bevin, however, and, given his blatant hostility to public pensions, he may insist on attempting to pass another pension-gutting bill in order to score a political victory ahead of his re-election campaign. Only time will tell, but the legislative session in Kentucky begins on Monday, so we should know soon which path the state will choose.

There may be fresh attacks on public pensions in Iowa and Texas in 2019. Public employees, retirees, and their allies in Iowa have long suspected that Republican politicians plan to gut the Iowa Public Employees Retirement System (IPERS). Following the re-election of Republican Governor Kim Reynolds, this seems a distinct possibility, given the attacks on public employees and their collective bargaining rights in recent years. In Texas, the state legislature needs to increase its contributions to the statewide pension plans. For years, the state legislature has contributed the lowest possible amount to the pension plans, according to the provisions of the state constitution. However, after political pressure to lower the assumed rate of return for the statewide pension plans, the state must do more than the bare minimum to assure retirement security for future generations of public employees. Expect to see some state legislators push to gut the statewide pension plans rather than act responsibly and improve funding of the plans.

In other states, public employees, retirees, and their allies will take a positive, proactive approach and fight to strengthen retirement security. In New Hampshire, Oklahoma, and Wyoming, public employees are preparing to fight for Cost of Living Adjustments (COLAs). Last year, bills to grant COLAs in New Hampshire and Oklahoma ended up as one-time stipends for certain retirees. Expect to see new pushes this year for true, meaningful COLAs for all retired public employees in these states. It has been more than a decade now since retired public employees in New Hampshire, Oklahoma, or Wyoming have received a COLA – something that is long overdue.

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